Saudi Arabia revises down its budget deficit for 2021 to $22.7bn amid rising spending
State spending this year is estimated at a little over SR1 trillion,
compared to SR990 billion in the previous estimate, the ministry said.
Total revenues this year are expected to reach SR930 billion, up from the earlier forecast of SR849 billion.
"The
economic growth in 2021 is still below the levels needed to recover
from the contraction in 2020 which requires policymakers to reduce the
tightening and the fiscal policy by reviewing down the VAT tax in 2021,"
Mohammed Al Suwayed, CEO of Razeen Capital told Arab News.
Total
expenditure reached SR465 billion ($123 billion) during the first half
of 2021, a decrease of 0.9 percent compared to the last year,
This represents 47 percent of the total approved budget, the ministry added.
Real
non-oil GDP saw growth of 5.4 percent in the six months to July, as
private sector performance exceeded pre-pandemic levels with registered
growth of 7.5 percent.
This reflects a general improvement in various economic activities, the ministry said.
Private
investment indicators have increased by 12.3 percent in H1 of 2021 —
evidence of the improved performance of the private sector, the ministry
claimed.
The consumer price index increased by 5.5 percent over the same period, compared to 1 percent in the previous estimate.
The
purchasing managers’ index witnessed growth, posting an average for H1
of the current year of 55.4 points compared to 48.3 points for the same
period last year, peaking in January 2021, at 57.1 points, the ministry
said.
